Natural gas settled higher by 0.65% at Rs 280.2, buoyed by a decrease in daily U.S. production and projections for warmer-than-normal weather extending through the end of September, which may maintain cooling demand. LSEG reported average Lower 48 gas output at 113.2 billion cubic feet per day in September, an increase from the August monthly record of 112.2 bcfd. However, daily production is anticipated to decline to a two-month low of 108.4 bcfd on Tuesday. Record production and mild spring weather have sustained U.S. natural gas inventories above the five-year average since March.

LSEG anticipates that average demand in the Lower 48, inclusive of exports, will decrease from 108.4 bcfd this week to 106.1 bcfd next week, with adjustments made to forecasts reflecting a downward revision from prior expectations. Average gas flows to nine major U.S. LNG export plants rose to 18.3 bcfd in September, up from 17.2 bcfd in August, yet still fell short of the monthly record of 18.8 bcfd set in April. Weekly storage data indicated that U.S. energy firms injected 40 bcf of natural gas for the week ending September 4. This figure surpassed market expectations of 31 bcf, yet fell short of the 69-bcf injection noted in the corresponding week last year, as well as the five-year average increase of 52 bcf.

Total inventories increased to 3.254 tcf, reflecting a 2.4% decrease compared to the previous year, yet standing 4.8% higher than the five-year average. The EIA anticipates that U.S. dry gas production will rise from 107.6 billion cubic feet per day in 2025 to 111.2 billion cubic feet per day in 2026, and further to 116.0 billion cubic feet per day in 2027. Domestic petrol consumption is anticipated to reach 92.0 bcfd in 2026 and 94.8 bcfd in 2027.

Meanwhile, LNG exports are expected to increase from 15.1 bcfd in 2025 to 17.4 bcfd in 2026 and further to 18.6 bcfd in 2027. Technically, the market is experiencing short covering, as evidenced by a 17.89% decline in open interest to 32,086, accompanied by a price increase of Rs 1.8. Natural gas is currently experiencing support at Rs 276.6. A breach of this threshold may lead to a decline toward Rs 272.9. Resistance is positioned at Rs 283.7, and a sustained movement above this level may propel prices toward Rs 287.1.